HISTORYWhile Arab and Malay sailors knew of Mauritius as early as the 10th century AD and Portuguese sailors first visited in the 16th century, the island was not colonized until 1638 by the Dutch. Mauritius was populated over the next few centuries by waves of traders, planters and their slaves, indentured laborers, merchants, and artisans. The island was named in honor of Prince Maurice of Nassau by the Dutch, who abandoned the colony in 1710.

The French claimed Mauritius in 1715 and renamed it Ile de France. It became a prosperous colony under the French East India Company. The French Government took control in 1767, and the island served as a naval and privateer base during the Napoleonic wars. In 1810, Mauritius was captured by the British, whose possession of the island was confirmed 4 years later by the Treaty of Paris. French institutions, including the Napoleonic code of law, were maintained. The French language is still used more widely than English.

Mauritian Creoles trace their origins to the plantation owners and slaves who were brought to work the sugar fields. Indo-Mauritians are descended from Indian immigrants who arrived in the 19th century to work as indentured laborers after slavery was abolished in 1835. Included in the Indo-Mauritian community are Muslims (about 15% of the population) from the Indian subcontinent.

The Franco-Mauritian elite controls nearly all of the large sugar estates and is active in business and banking. As the Indian population became numerically dominant and the voting franchise was extended, political power shifted from the Franco-Mauritians and their Creole allies to the Hindus.

Elections in 1947 for the newly created Legislative Assembly marked Mauritius' first steps toward self-rule. An independence campaign gained momentum after 1961, when the British agreed to permit additional self-government and eventual independence. A coalition composed of the Mauritian Labor Party (MLP), the Muslim Committee of Action (CAM), and the Independent Forward Bloc (IFB)--a traditionalist Hindu party--won a majority in the 1967 Legislative Assembly election, despite opposition from Franco-Mauritian and Creole supporters of Gaetan Duval's Mauritian Social Democratic Party (PMSD). The contest was interpreted locally as a referendum on independence. Sir Seewoosagur Ramgoolam, MLP leader and chief minister in the colonial government, became the first prime minister at independence, on March 12, 1968. This event was preceded by a period of communal strife, brought under control with assistance from British troops.

GOVERNMENT AND POLITICAL CONDITIONS Mauritian politics are vibrant and characterized by coalition and alliance building. All parties are centrist and reflect a national consensus that supports democratic politics and a relatively open economy with a strong private sector.

Alone or in coalition, the Mauritian Labor Party (MLP) ruled from 1947 through 1982 and returned to power in 1995. The Mauritian Militant Movement/Mauritian Socialist Party (MMM/PSM) alliance won the 1982 election. In 1983, defectors from the MMM joined with the PSM to form the Militant Socialist Movement (MSM) and won a working majority. In July 1990, the MSM realigned with the MMM, and in September 1991, national elections won 59 of the 62 directly elected seats in parliament. In December 1995, the MLP returned to power, this time in coalition with the MMM. Labor's Navinchandra Ramgoolam, son of the country's first prime minister, became prime minister himself. Ramgoolam dismissed his MMM coalition partners in mid-1997, leaving Labor in power except for several small parties allied with it. Elections in September 2000 saw the re-emergence of the MSM-MMM as a winning alliance, as the coalition garnered 51.7% of the vote, and Sir Anerood Jugnauth once again became the prime minister.

Mauritius became a republic on March 12, 1992. The most immediate result was that a Mauritian-born president became head of state, replacing Queen Elizabeth II. Under the amended constitution, political power remained with parliament. The Council of Ministers (cabinet), responsible for the direction and control of the government, consists of the prime minister (head of government), the leader of the majority party in the legislature, and about 20 ministries.

The unicameral National Assembly has up to 70 deputies. Sixty-two are elected by universal suffrage, and as many as eight "best losers" are chosen from the runners-up by the Electoral Supervisory Commission using a formula designed to give at least minimal representation to all ethnic communities and under-represented parties. Elections are scheduled at least every 5 years.

Mauritian law is an amalgam of French and British legal traditions. The Supreme Court--a chief justice and five other judges--is the highest judicial authority. There is an additional right of appeal to the Queen's Privy Council. Local government has nine administrative divisions, with municipal and town councils in urban areas and district and village councils in rural areas. The island of Rodrigues forms the country's 10th administrative division.

Principal Government OfficialsPresident--Karl Auguste OffmanVice President--Raouf BundhunPrime Minister--Sir Anerood Jugnauth Ambassador to the United States--Usha JeetahAmbassador to the United Nations--Jugdish Koonjul

ECONOMYMauritius has one of the strongest economies in Africa, with a GDP of $4.5 billion in 2001 and per capita income close to $3,800. The economy has sustained high 6% annual growth rate for the last two decades--first driven by sugar, then textiles/apparel and tourism, and most recently by financial services. Independent assessments uniformly rank Mauritius as one of the most competitive economies in Africa. With a per capita income of U.S. $3,800, Mauritius is now classified as a middle-income country and ranks, on the basis of the recent Human Development Index for 173 countries, 67th globally, 40th among developing countries, and second in Africa.

Economic growth slowed down in 2001, falling to 5.8% from 9.3% in 1999, mainly as a result of a lower growth rate in the sugar and tourism sector. In 2002, the economy is expected to expand by 4%.

Over the past 5 years Mauritius registered balance-of-payments surpluses leading to a comfortable external reserves position (currently equivalent to more than 9 months of imports), an external debt service ratio of only 7%, and modest single-digit inflation on average. The inflation rate increased from 4.2% in 2000 to 5.4% in 2001. It is expected to reach 6.3% in 2002, owing to the recent increase in the rate of VAT from 12% to 15% as well as large increases in government spending.

However, the rising trend in unemployment and the deterioration in public finances are matters of concern. The unemployment rate rose steadily from 2.7% in 1991 to 9.2% in 2001, representing 48,000 unemployed people. It is expected to reach more than 10% in 2002. The budget deficit increased from 3.8% of GDP in fiscal year 1999-2000 (July-June) to 6.7% in FY 2001-02. As a result of a series of fiscal measures taken by the government, the budget deficit is expected to fall to 6% on FY 2002-03. However, the government's objective is to bring down the budget deficit gradually to about 3% of GDP by FY 2005-06.

While Mauritius relies heavily on exports of sugar, textiles/garments, and tourism, services like Freeport, offshore business, and financial services constitute other pillars of the economy. The offshore sector is playing an increasingly important role in the financial services sector and is emerging as a growth vehicle for the economy. At the end of October 2002, the number of companies registered in the offshore sector reached 20,111. The Mauritius Freeport, the customs duty-free zone in the port and airport, aims at transforming Mauritius into a major regional distribution, transshipment, and marketing center. The Freeport zone provides facilities for warehousing, transshipment operations and minor processing, simple assembly, and repackaging. At the end of October 2002, the total number of Freeport licenses issued reached 940, of which 230 companies were operational, mostly in trading activities.

There has been growing realization on the part of the government that the traditional industries of sugar, textile, and tourism are no longer capable of sustaining further wealth and job creation. Accordingly, the government is giving high priority to the development of the Information and Communications Technologies (ICT) sector with the aim of transforming Mauritius into a cyber island. The Business Parks of Mauritius, Ltd. was set up by the government to spearhead the development, construction, and management of major business and IT parks in Mauritius. It has secured a line of credit of $100 million from the Indian Government for the creation of the first cyber-city at Ebene, which is expected to be completed by December 2003. Already a number of renowned international firms engaged in software development, ICT training, PC manufacturing and call centers, are planning to start operations in the cyber city. Also expected to give a further boost to the development of the ICT sector are the recent operation of the Southern Africa Far East (SAFE) optical fiber cable and the liberalization of telecommunications services beginning January 1, 2003.

Although the near-term outlook for growth is encouraging, the challenges facing Mauritius in the long-term are daunting. On the domestic front, the decline in fertility and the aging of the population will decrease the available pool of labor for the economy, thus reducing the long-term growth potential. Also, before the end of this decade, the trade preferences and the market protection on which Mauritius has built its success will be eroded by the forces of globalizaton, liberalization, and economic integration. The elimination in December 2004 of the global quotas on clothing under the Multi-Fiber Arrangement will expose the local textile sector to competition from other exporting countries, including those in Asia and South America. In the case of sugar, ongoing negotiations between the European Union and sugar-exporting countries and future multilateral liberalization will likely reduce the profitability of the Mauritian sugar industry.

The government has taken a number of measures to prepare the country to face these challenges. With regard to sugar, the government has come up with a 5-year Sugar Sector Strategic Plan (2001-05), which provides for the restructuring and rationalization of the sugar industry, decreasing the number of sugar mills from 14 to 7 and reducing the current labor force of 30,000 by up to 7,000 through a voluntary retirement scheme. As far as the textile sector is concerned, the U.S.-Africa Growth and Opportunity Act (AGOA), which provides preferential access for apparel exports to the U.S. market, is expected to mitigate the negative effect of the elimination of the Multi-Fiber Agreement at the end of 2004. The AGOA also is seen as a good opportunity to diversify the sector by encouraging spinning and weaving operations and promoting regional integration of the local textile industry with other Sub-Saharan countries eligible for AGOA benefits.

FOREIGN RELATIONSMauritius has strong and friendly relations with the West as well as with India and the countries of southern and eastern Africa. It is a member of the African Union (AU), World Trade Organization (WTO), the Commonwealth, La Francophonie, the Southern Africa Development Community (SADC), the Indian Ocean Commission, Community of Eastern and South African States (COMESA), and the recently formed Indian Ocean Rim Association.

Trade, commitment to democracy, and the country's small size are driving forces behind Mauritian foreign policy. The country's political heritage and dependence on Western markets have led to close ties with the European Union and its member states, particularly the United Kingdom and France, which exercises sovereignty over neighboring Reunion.

Considered part of Africa geographically, Mauritius has friendly relations with other African states in the region, particularly South Africa, by far its largest continental trading partner. Mauritian investors are gradually entering African markets, notably Madagascar and Mozambique. Mauritius coordinates much of its foreign policy with the Southern Africa Development Community and the African Union.

Relations with India are strong for both historical and commercial reasons. Foreign embassies in Mauritius include Australia, the United Kingdom, China, Egypt, France, India, Madagascar, Pakistan, Russia, and the United States.

DEFENSEMauritius does not have a standing army. All military, police, and security functions are carried out by 10,000 active-duty personnel under the command of the Commissioner of Police. The 8,000-member National Police is responsible for domestic law enforcement. The 1,400-member Special Mobile Force (SMF) and the 688-member National Coast Guard are the only two paramilitary units in Mauritius. Both units are composed of police officers on lengthy rotations to those services.

The SMF is organized as a ground infantry unit and engages extensively in civic works projects. The Coast Guard has four patrol craft for search-and-rescue missions and surveillance of territorial waters. A 100-member police helicopter squadron assists in search-and-rescue operations. There also is a special supporting unit of 270 members trained in riot control.

Military advisers from the United Kingdom and India work with the SMF, the Coast Guard, and the Police Helicopter Unit, and Mauritian police officers are trained in the United Kingdom, India, and France. The United States provides training to Mauritian Coast Guard officers in such fields as seamanship and maritime law enforcement.

U.S.-MAURITIAN RELATIONSOfficial U.S. representation in Mauritius dates from the end of the 18th century. An American consulate was established in 1794 but closed in 1911. It was reopened in 1967 and elevated to embassy status upon the country's independence in 1968. Since 1970, the mission has been directed by a resident U.S. ambassador.

Relations between the United States and Mauritius are cordial and largely revolve around trade. U.S. exports to Mauritius are modest but growing, particularly in telecommunications and other high-technology fields. In 2001, Mauritius imported U.S. goods valued at $62 million; the United States imported $333 million in Mauritian products--mostly knitwear, other textiles, and sugar. The proclamation of the AGOA II provisions on November 13, 2002, which provides for the duty-free entry of knit-to-shape garments into the U.S. market and the upcoming second U.S.-Africa Trade and Economic Cooperation Forum scheduled for January 2003 in Mauritius, is expected to give a further boost to trade and investment between the United States and Mauritius.

The United States funds a small military assistance program focused on Coast Guard training. The embassy also manages special self-help funds for community groups and nongovernmental organizations and a democracy and human rights fund.

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